Hurricane Gives US Power Sector a Wake-Up Call

The US power grid needs a complete overhaul in order to keep up with an ever-increasing demand.
Published: Wed 06 Mar 2013

Severe storms such as Hurricane Sandy have highlighted the fragility of the US power grid structure. The recent storm damaged power lines in the Mid-Atlantic and Northeast region, which left up to 6.5 million people without electricity. But it’s not just the power lines that are a cause for concern. The US power grid, described by the National Academy of Engineering as the most influential engineering innovation of the 20th century, is ageing and stretched to capacity. There have long been warnings that systems, which began linking to one another in the 1920s, need an expensive overhaul. Experts fear failures that caused blackouts in New York, Boston and San Diego may become more prevalent as the escalating demand for power continues to grow. They say it will take a multibillion-dollar investment to avoid them. Although power outages aren’t national tragedies, the results are devastating. In the long-term, they cost money. Outages can easily add US$80bn to US$188bn annually to US expenditures, and in the short-term, they can shut down businesses, cities and daily routines.

The aging of equipment explains some of the equipment failures that lead to intermittent failures in power quality and availability, according to a report compiled by the American Society of Civil Engineers (ASCE).  The report shows that the capacity of equipment explains why there are some bottlenecks in the grid that can also lead to outages. Many believe that the lack of development is due to a decade of arguing the roles of private and public sectors, whilst the rest of the world adapts and innovates. Urgent development calls for the renewal of public and private partnerships, cutting of red tape and the elimination of uncertainty when it comes to modernizing and upgrading infrastructure. The US electric power sector is second last amongst major U.S. industries in terms of research and development spending as a percentage of revenue. In fact, R&D represented a mere 0.3% of net sales between 1995 and 2000. Between 2001 and 2006, the figure was 0.17%. The sector continued to hover on the extreme low-end of the spending scale for the past decade.


As the digitization of society continues to grow, it becomes increasingly critical that investments are made in development so as to accommodate the growing need for electricity. It is projected that the world’s electricity supply will need to triple by 2050 to keep up with demand.

According to researchers, the US will need to replace all their electricity generation plants by 2050. Although the US needs more power plants to meet the demands of a growing population, the most immediate threat is that the delivery system will continue to fail. This calls for a complete power grid upgrade. Part of the upgrade will involve the move to a “smarter” grid, improving energy efficiency and the efficient integration of cleaner, intermittent energy sources. Areas, already equipped with smart grid technology, reported a more efficient power recovery time period than those without. With the increase of severe weather across the US, the installation of smart grid technology will definitely become essential. The two-way digital communication technology is not only useful in power restoration. It also helps consumers to monitor, and therefore better control, their power usage. Consumers will be able to obtain instantaneous information on pricing and trends in overall electricity usage, allowing them to use appliances when they are cheapest. Utilities can use the data, obtained from the technology, to determine electricity costs and distribution patterns. Device automation also saves time as staff can access data without having to send staff to the source. This is especially helpful during severe weather conditions when it may be impossible for staff to venture out into the elements. Power losses (technological or otherwise) are also located by the smart grid technology. The Smart Grid also proves to be cost-effective. According to the country’s Department of Energy, for every dollar spent, a return of approximately US$4 to US$5 can be expected in the form of electricity savings, job growth, and productivity.

A smarter grid

The US is not alone in promoting the smart grid as an economic growth engine. Most major economies are in the process of deploying smart grid technologies.

While today’s grid remains largely reliant on power generated at large, centralized fossil-fuel-burning power plants, tomorrow’s “smarter” grid will allow for greater amounts of distributed generation and storage, giving consumers the opportunity to produce their own clean energy, and to sell any excesses back to the grid. While today’s distribution grid lacks real-time visibility and control, are largely running blind and consequently costing the U.S. economy approximately US$100bn to US $150bn each year in power outages, tomorrow’s grid will be smarter as it has the ability to anticipate disruptions self-heal.

Consumers are already starting to realize the effectiveness of smart appliances, lightning systems and management systems, using “set-it-and-forget-it" technologies to automate their homes and businesses for energy savings and other preferences, such as increased levels of green energy. Over the next 10-20 years, consumers will be introduced to the deployment of new home energy “apps,” such as community “micro-grids” which are able to generate 100% of their own power over certain periods, while trading energy for profit during other periods, to electric vehicles able to determine the most affordable hour of the day to charge their own batteries.                                     

Meanwhile, an immeasurable number of innovations and applications have yet to be invented and are waiting for our next great generation to develop them.  

Engerati Analysis

It is impossible to run a digital 21st century economy on a 20th century grid. Major economies like the US simply cannot afford not to spend on research and development when it comes to their electric infrastructure.


American Security Project-Can the Smart Grid Solve America’s Forthcoming Electricity Problem?

Forbes-Living In The Dark: Why The US Needs To Upgrade The Grid

GreenTech Media-Building a Smart Grid Will Help Recharge Our Nation


Washington Post-Aging power grid on overload as US demands more electricity